1 Complaints rectified 2010-11 Mr Willie Rennie: Resolution Letter Letter to Mr Thomas Docherty MP from the Commissioner, 27 May 2010 I have now concluded my consideration of the complaint you sent me on 24 June 2009 about the office expenses of Mr Willie Rennie. In essence, your complaint was that the costs which Mr Rennie claimed against the Incidental Expenses Provision (IEP) for his constituency office and certain office equipment while a Member of Parliament were not wholly, exclusively and necessarily incurred on his parliamentary duties and helped to meet the costs of party political activities, contrary to the rules of the House. As you know, I did not accept your complaint about the alleged use of Mr Rennie's text messaging service. I am sorry that this inquiry has taken longer than I would have wished, but I thought it right to ensure that it was sufficiently thorough to enable me fully to establish the facts. In doing so, I consulted extensively with Mr Rennie and the House authorities about this matter and carefully examined a wide range of documents and invoices which were made available to me. I will deal first with Mr Rennie's claims against the IEP for his then constituency office. Mr Rennie had three different constituency offices after his election in February 2006, and made claims in respect of each of these. I have checked on the arrangements for all three. Mr Rennie's first office, which he vacated at the end of May 2006, was sublet from the Scottish Liberal Democrats, who had rented it from the Council for use as a by-election headquarters. His evidence is that the party did not share that office with him. He made payments to the Scottish Liberal Democrats from his IEP in respect of rent, rates and a service charge. These payments were equivalent to those levied by the Council on the mid landlord, the Scottish Liberal Democrats. While occupying his first office, Mr Rennie found permanent premises on the second floor of 1 High Street, Dunfermline. But these premises required renovation by the landlord and so were not available for him to use until the beginning of September 2006. In the intervening period, Mr Rennie rented another office also in 1 High Street. He paid the rent for this second office from his IEP direct to the building management company. His political party did not share that office with him. Mr Rennie occupied his third property in September 2006. This was leased by Dunfermline Liberal Democrats from 1 September 2006, and was formally sub-let by them to Mr Rennie and the then MSP from that date to 31 August 2009. It was occupied by Mr Rennie, the MSP and Dunfermline Liberal Democrats. The initial rent specified in the sub-lease was £8,000 a year. The sub-lease provided “for the avoidance of doubt” that Mr Rennie was required to pay a minimum share of 70% of the rent, and had an exclusive right to occupy a 70% share of the premises. A new sub-lease, covering the period from 10 May 2007 to 31 August 2009 and on similar terms to the original, was entered into with Mr Rennie and a new MSP after the Scottish parliamentary elections. I have seen copies of both leases, and also of a contemporary independent valuation which suggested that a fair leasehold value for the property was £8,000 per annum. Mr Rennie's evidence is that he lodged the valuation with the House authorities when the lease began although they have no record of having received it at the time. In the event, the initial rent charged by the landlord to the Dunfermline Liberal Democrats was £7,050 per annum. The terms of the sub-lease appear in practice to have been overtaken by a more comprehensive understanding between Mr Rennie, the MSP and Dunfermline Liberal Democrats on the sharing of office costs generally. Under this, the total shared office costs, including the rent paid to the landlord by Dunfermline Liberal Democrats, were to be split 60% for Mr Rennie, 30% for the MSP and 10% for Dunfermline Liberal Democrats. This division of costs took account both of space occupied by those involved, and of their use of common facilities and services such as the telephone, energy, etc. This understanding continued when the MSP changed following the Scottish parliamentary election. No formal agreements was drawn up by those involved in either case, and thus none was deposited by Mr Rennie with the Department of Resources, as required by the Green Book. 2 Complaints rectified 2010-11 For the remainder of the 2006-07 financial year, bills for office costs were paid directly by Mr Rennie and Dunfermline Liberal Democrats, with a contribution from the MSP for his share. Mr Rennie's evidence is that it was agreed that, for simplicity, Dunfermline Liberal Democrats would from April 2007 meet all the office costs, and charge him and the MSP an all-in sum to cover their respective shares. From April 2007 to March 2009, Mr Rennie made quarterly payments of £3,000 from his IEP to meet his assessed share of the costs of the office. From September 2007, these were made quarterly in advance. From April 2009, the payments were reduced by Mr Rennie to £2,600 per quarter, to reflect the reduction of business rates to zero and more settled electricity and phone billing. No provision was made for any periodic reconciliation of the payments made by Mr Rennie to the actual costs incurred by Dunfermline Liberal Democrats in running the office. Mr Rennie also paid an additional £2,000 to the Dunfermline Liberal Democrats in February 2008. He told me that this payment was in respect of the previous financial year, and that it related to a telephone bill, charges for common areas shared with other tenants in the building, and a disputed electricity bill from that period. During the period covered by this complaint, Members were permitted to rent offices from their local party organisation. Mr Rennie supplied me with a breakdown of the costs which he says were incurred either by himself or by the Dunfermline Liberal Democrats in the running of the office, and of the payments made by himself and by the successive MSPs. I have examined these, and have considered carefully whether Mr Rennie's claims against the IEP for his constituency office were at a level which may also have covered some of the expenses of his political party. I have seen no evidence to suggest that the proportion of the costs which Mr Rennie agreed to meet was unreasonable. This allocation of costs appears to have been based on objective criteria, including space occupied and relative use of facilities and services. The key question here therefore, is whether the proportion of the expenses met by Mr Rennie from his IEP exceeded the 60% of eligible office costs which he was required to meet. I have found that in 2006-07, Mr Rennie met 43% of eligible costs, in 2007-08, 67%, and in 2008-09, 69%. Overall, from September 2006 to March 2009, I have found that Mr Rennie met 63% of total eligible costs. This amounts to a net overpayment by him from his IEP of 3% or £1,391 compared to the contribution he was required to make. I turn now to the purchase of the risograph. At the relevant time, the House authorities permitted Members to use their allowances to share the costs of certain equipment with their local party organizations, so there is no reason in principle why Mr Rennie should not have contributed from his IEP to the cost of purchasing a risograph for shared use. In this case, the facts are that Mr Rennie and the Dunfermline Liberal Democrats jointly purchased a risograph and a folding machine in April 2007. Mr Rennie contributed 60% of the purchase cost (£3,768) from his IEP, and the Dunfermline Liberal Democrats contributed the remaining 40%, which amounted to £2,512. I have seen copies of the supplier’s invoices both to Mr Rennie and to the local party which confirm this. The maintenance costs were shared likewise. This division of costs was based on the expected proportion of likely use. No log book of usage was kept. In my view, it would have been sensible for the parties to have kept one. Nor was any formal agreement drawn up to cover the basis of the shared use, so Mr Rennie had not deposited one with the Department of Resources, as required by the Green Book. Mr Rennie tells me that each user met their own costs of printing materials. Mr Rennie has given me estimates which suggest that in the period to the Dissolution of Parliament the Dunfermline Liberal Democrats’ usage of the equipment was in fact closer to 60%. He nevertheless believed that over the lives of the two machines usage would reflect a 60:40 split between himself and the party respectively. I have considered whether, given the difference between the actual pattern of usage and the pattern anticipated at the time of purchase, the constituency party benefited unreasonably from the contribution made by Mr Rennie from his parliamentary allowances to the purchase costs of the risograph and folding machine. Had the purchase costs been shared in the proportion of actual use in the first three years, Mr Rennie’s contribution would have been around £2,512, about £1,256 less than his actual contribution. I consider this a more accurate reflection of the costs of the purchase of this equipment based on subsequent actual usage.